Cell Genesys, Inc. (CEGE)

[Fatass]

Cell Genesys is extremely undervalued!

Number of Outstanding Shares 85.9 million
Exp. Year end cash $118-120 million
Outstanding Debt $119 million

Now hopefully $80 million of that debt will be bought back at a price between $25.6-32.0 million, remember this is still not for sure. We’ll find out at the latest 5th of December.

Exp. Year end cash will then be $86-94.4 million
And Outstanding Debt will change to $39 million

A little subtraction leaves between $47-55.4 million to the shareholders, assuming they’ll liquidate no later than the end of 4th quarter. This corresponds to cash of $0.547-0.645 per share.

In addition to this there is the matter of the PP&E, the most recent number I could find, is $112 million for PP&E, I guess they can get somewhere around $1 per share for PP&E, which is approx. 75% of the booked value (the $112 million).

Then there is the matter of Ceregene, I don’t think it carries a lot of value, since it’s only a 16% stake in a small company, at least it’s good that they started a new trial, Ceregene could be worth somewhere around $0.1 per share for Cell Genesys. Then there is the rest of the pipeline and a partnership with Novartis.

In my opinion it looks as we could get somewhere around $1.5-1.75 per share minimum. It could be even more, if the PP&E sells for more, or if the rest of the debt is sold for less than 1 to 1, or lastly it they get a good price for the rest of the pipeline.

There is also the scenario that they merger, but we just have to wait and see what happens. I assume these are the only scenarios, Liquidation, Buy-out or Merger.